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Low EPF transparency endangers Sri Lanka private sector savings: Verite ...
Sri Lanka's largest superannuation fund, the Employees' Provident Fund (EPF), has lower disclosure standards than listed firms, commercial banks, and unit trusts, a Colombo-based think tank said.
EPF lags behind listed companies and banks on transparency: Verité Research
The Employees’ Provident Fund (EPF), despite being Sri Lanka’s largest financial institution, has lower transparency and disclosure standards compared to other entities that manage funds on behalf of third parties, such as companies listed on the Colombo Stock Exchange (CSE), licenced commercial banks, and unit trusts. This was revealed in a new research brief by Verité Research titled ‘The Employment Provident Fund in Sri Lanka: A Comparative Assessment of the Adequacy of Information Disclosure’ published recently. The brief found that the EPF discloses less information, in less detail, less often, and with less timeliness than these other entities, which also hold pools of public savings. This suggests that the Central Bank of Sri Lanka (CBSL), as the manager of the EPF, applies lower transparency standards to the EPF than is applied to other financial entities that are regulated. The EPF also falls short of the international benchmarks for timely, detailed, and accessible public disclosure of fund information as specified in the ‘Organisation for Economic Co-operation and Development’s (OECD) International Organisation of Pension Supervisors’ (IOPS) principles and the ‘Global Pension Transparency Benchmark (GPTB).’ These shortcomings are critical due to the unique position of EPF members. Private sector workers are mandated by law to contribute to the EPF, play no role in the Fund’s management, and cannot withdraw their savings at will. Consequently, adhering to global standards of transparency is the only safeguard members have to ensure their future welfare is protected. This concern is further heightened by the EPF’s past exposure to financial malpractice, as revealed in the forensic audits published in 2019. The research brief identifies that three short- to medium-term reforms can address these failures. First, ensuring full compliance with the EPF Act; second, adopting international best practices; and third, enacting the 2024 private member’s Bill on EPF disclosure. Longer-term reform includes the need for more robust regulation of the EPF to protect the interests of EPF members and the integrity of the EPF. The full research brief by Verité Research can be accessed at https://www.veriteresearch.org/publication/the-employment-provident-fund-in-sri-lanka-a-comparative-assessment-of-the-adequacy-of-information-disclosure/.
EPF lags listed companies and banks on transparency: Verité Research ...
The Employees’ Provident Fund (EPF), despite being Sri Lanka’s largest financial institution, has lower transparency and disclosure standards compared to other entities that manage funds on behalf of third parties, such as companies listed on the Colombo Stock Exchange, licensed commercial banks, and unit trusts.This was revealed in a new research brief by Verité Research titled ‘The Employment Provident Fund in Sri Lanka: A Comparative Assessment of the Adequacy of Information Disclosure’ published today.The brief found that the EPF discloses less information, in less detail, less often, and with less timeliness than these other entities, which also hold pools of public savings. This suggests that the Central Bank of Sri Lanka (CBSL), as the manager of the EPF, applies lower transparency standards to the EPF than to other regulated financial entities.The EPF also falls short of the international benchmarks for timely, detailed, and accessible public disclosure of fund information as specified in the ‘OECD’s International Organisation of Pension Supervisors (IOPS) principles and the Global Pension Transparency Benchmark (GPTB)’.These shortcomings are critical due to the unique position of the EPF members. Private-sector workers are mandated by law to contribute to the EPF, play no role in the fund’s management, and cannot withdraw their savings at will. Consequently, adhering to global standards of transparency is the only safeguard members have to ensure their future welfare is protected. This concern is further heightened by the EPF’s past exposure to financial malpractice, as revealed in the forensic audits published in 2019.The research brief identifies that three short- to medium-term reforms can address these failures. First, ensuring full compliance with the EPF Act, second, adopting international best practices, and third, enacting the 2024 private member’s bill on EPF disclosure. Longer-term reform includes the need for more robust regulation of the EPF to protect the interests of the EPF members and the integrity of the EPF.
Verité Research says EPF lags behind listed companies and banks on ...
Sri Lanka's largest financial institution is keeping its members in the dark, according to new research that finds the Employees' Provident Fund (EPF) falls well short of the transparency standards applied to other bodies that manage public money. A research brief published by Verité Research found that the EPF, which is managed by the Central Bank of Sri Lanka, discloses less information, in less detail, less frequently, and less promptly than listed companies on the Colombo Stock Exchange, licensed commercial banks, and unit trusts, all of which similarly hold pools of public savings. The finding points to an uncomfortable inconsistency, where the Central Bank, which regulates other financial entities to higher standards, appears to hold itself to a lower bar when managing the EPF. The shortfall does not stop at local comparisons. The brief found that the EPF also fails to meet international benchmarks for disclosure, including the principles set by the OECD's International Organisation of Pension Supervisors and the Global Pension Transparency Benchmark. Verite noted that private-sector workers in Sri Lanka are legally required to contribute to the EPF, have no say in how the fund is managed, and cannot withdraw their savings freely. "These shortcomings are critical due to the unique position of the EPF members. Private-sector workers are mandated by law to contribute to the EPF, play no role in the fund’s management, and cannot withdraw their savings at will. Consequently, adhering to global standards of transparency is the only safeguard members have to ensure their future welfare is protected. This concern is further heightened by the EPF’s past exposure to financial malpractice, as revealed in the forensic audits published in 2019," Verite said. The research also identifies three short- to medium-term reforms that can address these failures. First, ensuring full compliance with the EPF Act, second, adopting international best practices, and third, enacting the 2024 private member’s bill on EPF disclosure. Longer-term reform includes the need for more robust regulation of the EPF to protect the interests of the EPF members and the integrity of the EPF.
